Online Business Ideas | Merchant Account Credit Card Transactions

Written By Steps To Faculty Published December 21st, 2010

A bank account that authorizes the acceptance of credit cards and transferring of money to the bank of your choice is a merchant account. Credit cards are accepted through PC processing software, credit card terminal or through telephone and internet virtual terminal. There are a lot of online business ideas and one of them is accepting credit card payments in your website.

Steps in Processing Credit Card Transactions

Steps 1 – A lot of institutions are accepting credit cards by the use of software which is a good online business idea. It may sound so easy but problems also occur with these companies, like over charges, frozen funds, and middle man surcharges. The right choice of Merchant accounts can eliminate these problems.

Step 2 – The process of this transaction though a little bit complicated takes only a few seconds.  With this kind of online business idea the customer chooses a product on the Merchant’s websites and pay using a credit card.  You will be connected by the browser to the host server and will be provided with a payment form. The credit card information that is entered to the payment form is totally confidential. The information is transferred to the secured server by the host.  Then the secure host server connects to the processing bank of the merchant through a third party. This process could also be done directly if the processor has its own secure payment gateway.

Step 3 – The processor then validates the card and confirmation of availability of the funds. The processor is given the code of authorization in case the transaction is approved and is given to secure payment gateway. The payment gateway converts the authorization into an encryptions and transmits to the Merchants web server to complete the order. The web server of the Merchants sends a confirmation to the customer’s browser. The due amount is then transferred from the bank of cardholder. The next three days, the merchant’s bank can then transfer the money to the local bank.


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